What are the 5-10 most popular/interesting different business (monetization) models that exist within the life-improvement space? Provide a few examples of each, just by name.
Below is a compilation of five different business monetization models that have been found to be extremely successful within the category of life-improvement. Specifications about how the different models work, as well as necessary steps for success in each model are provided. In addition, a few relevant examples of companies that have success with each monetization model are given.
With a free business model, users pay nothing to download an app or use your service. This is a very effective option if a product/service is something that is easily accessible for free online already. While it might seem like there is no money to be made with this scheme, it is not only possible, but can be very effective to market an application for free. With no price barrier, users are often more open to downloading and trying out the app. If they like it enough, they will spread the word about it to friends, further growing the base business. One way of overcoming the free price, is by showing relevant ads in the app. This not only keeps users interested, but also provides the opportunity, as a business owner, to get cash from other companies who want to market their products. Some examples of successful free applications are as follows:
3. Musical.ly — Musical.ly has been a successful free business model company by offering their users the opportunity to pay for certain types of videos, user numbers have grown tremendously, making Musical.ly a renowned application.
4. Twitch — This business offers free video streaming of online content to its users at no cost. They mainly make their profit off of ads, but have also branched out to offer subscriptions to remove ads.
In a freemium business model, users pay nothing to download an app or use a service. However, they do have the option to purchase additional content through in-app purchases. This is a combination of a free and premium model, where only the basic features are offered at no cost, and additional features require either a one-time payment or a reoccurring subscription. Successful freemium applications need to have continuous support to update the app and add new content for those users that pay for extra content. A freemium model has been found to be very successful with B2B companies like Box, Splunk, and Yammer. To ensure success with this model, it is important to have constant updates for upgradable content so that users remain interested. Some examples of successful freemium applications are as follows:
1. Remente — Remenete is successful as a freemium company because it is free to download, but offers in-app purchases that encourage users to live a healthier life.
2. Zapier — This freemium service has been successful because they offer a small number of services for free to begin with (5 zaps), and from there, customers can purchase additional zap packages. This allows clients to see the value in an app, and realize that it is worth the extra few dollars!
In a subscription model, applications are often free, but the users pay within the app to purchase access to the content and services. Developers will often make the purchase an auto-renewing subscription that will constantly provide users with new and ever-changing content. In the case where the subscription is not auto-renewing, prompts can be set in place to encourage users to purchase another subscription. Subscription models are great for businesses that have products or services being consistently used over a long period of time. These models have been found to produce 2-3 times more revenue than one-time paid apps, and at least 50% more than freemium applications. Some examples of successful subscription applications are as follows:
1. Headspace — This applications provides users with basic functions for free, but offers greater features with a reoccurring subscription. Something that sets this business apart is that they offer multiple different subscription packs for users to choose from based off of their wants, needs, and usage.
2. Coach.me — This business has had success with subscriptions by offering different packages for their users based off of their specific needs.
3. ReflexionYoga — This company is a successful subscription service because of their attention to adding new content regularly.
Within a paid business model, applications have a set upfront price, but the content is free after purchasing. This model can be popular because users will consider the value of an application due to its price, and will be more likely to download it then. A "pay then play" mindset is what draws the users in here, and marketing is essential to convince users that your application is worth the price, especially since the initial purchase is your only source of income from the application. Successful paid applications often use in-game screenshots, detailed descriptions, and even app-bundles to attract more users. Some examples of successful paid applications are as follows:
1. HabitBull — This company has had success has a paid service because of their powerful marketing of app-specific features.
2. Habit List — Habit List provided a lengthy and detailed description of their application to help sell it to prospective buyers.
3. HotSchedules — This application has had success selling with a one-time payment due to their detailed in-app screenshots with descriptions in their app-preview.
Paymium business models seem the most enticing money-wise because they provide the most opportunities for users to spend money. However, in order to be a success, high expectations must be set to convince the user that the purchase will be worth it. Paymium applications require users to purchase the application upfront, and also offer in-app purchases for extra features. These types of products can be successful by offering premium design, functionality and content that cannot be found elsewhere. One way to encourage users to invest in these products is by lowering the initial app price while still offering the in-app purchases at full price. While adding additional revenue to the initial application price, it is important to make sure that the app is not unusable without in-app purchases; this can push customers away. Users need to be persuaded that the extra purchases are worth it, and to keep them interested, new content needs to be added and updated regularly. Some examples of successful paymium applications are as follows:
1. Habit Streak Pro — This application has had huge success by offering a separate, free application for users to test the app out, and then they are able to get the full capabilities by purchasing the pro-version.
2. iMoodJournal — iMoodJournal has succeeded not only because of their low initial application price, but also due to offering extra in-app purchases for a more inclusive experience.
Regardless of the monetization model chosen for the specific product or service, it is important to make sure that the product is marketed effectively. There is purchasing power in every different model in different ways, but some models may be better for certain types of services than others.